From the standpoint of economic efficiency, competitive markets provide:
A) less of a public good than would be efficient.
B) more of a public good than would be efficient.
C) exactly the amount of a public good that is efficient.
D) an efficient amount but at a higher cost.

Question

Quizplus · Accepted Answer

Competitive markets tend to underprovide public goods because they are non-excludable and non-rivalrous, leading to free-riding issues where individuals consume the good without contributing to its cost, resulting in less of the public good being produced than would be socially optimal.

From the Standpoint of Economic Efficiency, Competitive Markets Provide